Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/20181

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DC Field

Value

Language

dc.contributor.author

Schöb, Ronnie

en_US

dc.contributor.author

Wildasin, David E.

en_US

dc.date.accessioned

2009-01-28T16:12:13Z

-

dc.date.available

2009-01-28T16:12:13Z

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dc.date.issued

2003

en_US

dc.identifier.uri

http://hdl.handle.net/10419/20181

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dc.description.abstract

This paper investigates the effects of labor market integration, in the form of worker mobility, in a model with long-term labor contracts that lead to wage rigidities and unemployment. Reflecting the interdependence of regional labor markets, we develop a general-equilibrium framework where the contract structure is simultaneously determined in all regions. It is shown that increased mobility leads to more flexible labor market institutions in which firms can more easily vary the level of employment in response to fluctuations in demand. Economic integration is potentially Pareto-improving but, in the absence of a system of compensation, workers are harmed by greater labor mobility while the owners of firms benefit from higher profits.